CRIC

Consumer Durables sector customises media mix in new normal, drives digital transitions

The sector witnessed a drop in ad volumes across TV, print and radio, whereas digital ad insertions were up by 19% during April-May'21

e4m by Sonam Saini
Updated: Jun 14, 2021 12:00 PM
ad volume

Despite a slowdown in consumer durables sales during April-May, the industry leaders in the category are optimistic about a better Q1 this time around. However, the impact on sales affects advertising too, resulting in a decline in budgets. 

As per the TAM AdEx report, during April-May'21, average ad volumes per day on TV and radio dropped by 43% and 64%, respectively, as compared to Jan-Mar'21. At the same time, print saw a 73% decline in average ad space per publication per day compared to Jan-Mar'21. Interestingly, average ad insertions per day on digital increased by 19% compared to Jan-Mar'21. 

The category was amongst the highest spenders (advertising) across media in 2020 as per the PITCH Madison Advertising Report 2021 but maintained a low profile in the last two months. The category spent Rs 1328 crores on advertising in 2020. 

Chandru Kalro, MD of TTK Prestige, shared that the company didn't advertise in the offline space during the lockdown period since people were not going out but it did so in digital advertising and digital engagement activities to reach its consumers. Kalro said, "We expect advertising to come back in full swing by next quarter. We have new product launches as well, so obviously, there would be a lot of advertising that is going to happen."

The company usually spends around 6-6.5% of its revenue on advertising and promotions. Kalro hinted that the company plans to spend similar budgets this year as well. 

Kalro further explained that this year, the lockdown effect was moderate in April because it was a state lockdown, unlike last year. 

"The consumer demand remained normal during April in the markets where restrictions were imposed late. As soon as the lockdown was imposed in several states, it affected consumer demand as well." Since markets were completely shut in May, it affected the sales for that month. All the channels were closed except e-commerce, and only essentials were allowed in many states. 

"Now, we are seeing the unlock happening; things are looking up again. I am optimistic that our products will again have healthy demand in the coming days," expressed Kalro.  

Whether it is home appliances or home furniture, or electronics, the impact on these segments has been moderate this year, unlike last year, a washout period for most companies. 

"The second wave of Covid 19 has had an impact on our consumer durables business. A significant part of home furniture and appliances sales happen in Q1. The good news is that the home furniture sales in Q1 of 21-22 will be at least 150% better than last year. Unlike the previous year, there was no national lockdown, and restrictions on store opening started only in mid-April," shared Mehernosh Pithawalla, Head of Brand and Strategic Insights, Godrej & Boyce Mfg. Co. 

Pithawalla also highlighted that their work-from-home furniture has seen high demand. He said, "While the number of walk-ins in our Mumbai store has been decent, we are hopeful of reaching the pre-covid level once the shops open on a full-time basis. We have observed growth in furniture sales through e-commerce as customers are more open to virtual discussions over various video platforms. The overall revenue is expected to reach a normal level from July onwards."

Whereas for appliances, Pithawalla is pinning hopes on the upcoming festival season this year and hopes that demand will recover in H2 of FY22.

The ad spends figures of 2020 indicate that the category spends essentially on TV followed by Print, Radio, and OOH. However, the pandemic has pushed the sector to increase its spending on digital. 

Kalro mentioned, "In the past, 10% of our total advertising used to go into Digital and rest was spent into TV and Print. We are looking to spend almost one-third each on TV, Print, and Digital this time. 

Marketing spends have been optimised, keeping in mind the demand situation, retail environment, sentiments, and media consumption, explained Pithawalla. "For brands like Godrej Interio and Godrej Appliances, we have taken a decision to focus more on Digital media to ensure brand salience as well as performance-based marketing to generate leads. The traditional above-the-line (Print, OOH) media was used for more tactical communication in certain geographical pockets. We also reduced spends on outdoor and print during the lockdown to ensure cost-effectiveness."

As per the TAM report, during April-May'21 average ad insertions per day on digital increased by 19% compared to Jan-Mar'21

"With social distancing bound to remain as the new norm, and this year with a greater emphasis, digital efforts will continue during the course of the year. People end up searching online and making purchases online," added Deba Ghoshal, Vice President & Head of Marketing, Voltas. 

He further added that all their businesses and functions are digitally enabled in order to remain connected with the end-user. "There are multiple ways in which we will continue to innovate and re-look at marketing this year, which will be driven by cost optimization and digital. We strive for a holistic omnichannel strategy, where we focus on building accessibility for our customers in the ways they expect us to. We are well-prepared with a customized marketing strategy, to deliver for specific channel formats, both offline and online, and have adopted a flexible approach towards fill-ins at the PoS level," said Ghoshal. 

Rohit Mathur, President, electric fans, pumps and water heaters at Usha International said, "We at Usha continued our marketing activities; however, there was a change of media mix. The pandemic has been a significant catalyst for digital acceleration worldwide, leading to everyone, including us, allocate a lot more spends on digital platforms. We are also constantly looking for unique ways to connect and engage with our consumers via innovative digital strategies."

While there has been a downward trend in demand during the past two months, especially in May, the consumer sentiment now, fortunately, seems to be improving. "The recovery may take longer this year as the second wave has impacted consumers severely. As the infection rate declines across India, we are hopeful that there will be an uptick in demand for consumer durable goods in the coming months. "

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